Earlier this year, Hon Hai officially acquired Ambit Microsystems Inc., a former subsidiary of the Acer Group, in a bid to penetrate the web communication market.

Hon Hai and Apple share a relationship that dates back several years, with roots in desktop manufacturing. Over the past few years, Apple has reportedly expanded outsourcing to Hon Hai because it highly praises the company's ability to also produce high-quality IT products.

Hon Hai would not comment on the reports that it would produce the AirPort Express for Apple, citing the existence of business secrecy agreements with customers.

The IT company has history of shying away from comments on contract deals because it doesn't want its customers to be privy to its other business dealings. The company also manufacturers computer parts for Dell, Intel, HP, Sony, and Cisco Systems.

Presently, Hon Hai is Apple's largest contract manufacturer of desktop computers, producing both the eMac and Power Mac series.

Last month, Quanta Computer, Inc., which manufacturers many of Apple's portable and iMac computers, announced that it would begin delivering new notebook models to Apple in June.

Insiders believe the new notebook model may actually represent a new iMac computer, as the manufacturing of the two are similar.

Quanta also produced Apple's current line of iMac G4 computers. Sources believe Apple will refresh its entire line of iMac computers sometime in the next few weeks.